Agents

Dreams

24 October 2018

From Rachel Gardner, Literary Agent:

Whenever I (or other bloggers) write about marketplace realities in publishing, there are always a wide variety of responses, ranging from pragmatic acceptance to mournful disappointment to angry lament. My observation – and I could be wrong – is that the sad and mad responses are from writers whose passion for being published burns hot and bright, and whose publishing dreams have not yet been fulfilled. This is completely understandable, and I feel for you.

Many writers ache with the desire to hold a book in their hands that has their name beautifully printed across the cover. Many of you are nursing life-long visions of walking into Barnes & Noble and seeing your book on the front table. This business is all about our dreams, isn’t it?

I understand that. I am an absolute book-lover from childhood. I love books and bookstores, I love talking about books, I love spending Saturday afternoons reading books (not that I’ve been able to do that lately). I’ve written several published books, and edited many more. But what I don’t have – what I’ve never had – is a burning desire to see my name on the cover of a book. And I guess that’s why it’s easier for me to see publishing as a business.

. . . .

Publishing professionals – those who run publishing companies, those who edit and acquire books, those who represent authors – are on your side. By recognizing this as a business, they are not somehow evil, they are not somehow taking away from the beauty and purity of your art. They are, in fact, rooting for you, wanting you to show up with a wonderful book that others will enjoy reading. They have to look at the marketplace realities make decisions accordingly. They have to separate themselves from the emotion of it all and make plans and choices they hope will ensure the ongoing health and success of the publishing and bookselling industry.

We want to help your dreams come true. And everything I say here, everything I write on this blog, is with that goal in mind. All of the editors and agents who share their thoughts online are doing it with the same intent: to have dialogue, to keep communication open, to de-mystify publishing, to help educate and enlighten writers, to encourage them.

Link to the rest at Rachel Gardner, Literary Agent

PG has posted a few items from Rachel Gardner before and added some pungent comments.

This particular post makes him a little sad. While he definitely disagrees with some of her characterizations in the OP as he has with her previous posts, he thinks Ms. Gardner would be a perfectly pleasant person with whom to have a conversation on a topic other than the book business.

When she says she wants to help writers’ dreams to come true, he is persuaded that she really believes this is an important part of her work.

However, a great many authors with whom PG is acquainted want to earn a living as a writer. That’s a core part of their dream, far more important than visiting their books in a book store. And these authors are not living family estates, attending balls at neighborhood great houses and riding to hounds.

Many of the authors I’m thinking about want to earn a living from their writing and some would like to quit their day jobs so they can spend more time writing, working hard writing. They have no problems recognizing they are in a business and want to be very good at their business.

While these authors want to write very good books and feel the satisfaction of a job well done. Perhaps PG runs in very different authorical circles, but none of the very good authors with whom he is acquainted wake up in the morning wanting to savor the “beauty and purity” of their art.

Further, these authors do not want to “separate themselves from the emotion of it all,” because their professional emotions are characterized by grit and determination and a refusal allow anything to interfere with their desire to write very good books that will appeal to a significant audience and to keep on writing them as their life’s work.

A growing transfer of funds into their business accounts every month is an important part of their dreams. Writing is not a hobby and writing books that others are happy to buy and enjoy is completely compatible with quitting their day job and being able to hire others to help them pursue their passion more effectively. They want to hold onto the steering wheel and decide how fast they want to go and where.

Emotionally and rationally, a great many authors PG knows don’t want to wait for somebody else to get their books in front of readers and decide what the cover will look like and set a price higher than they know many of their readers will want to pay.

Fortunately, Ms. Gardner avoided the n-word. Every time, PG hears about a publisher or an agent nurturing an author and her career, he wants to barf.

PG would rather be nurtured by an honest coal miner than by some condescending twit in New York.

That term and the attitude behind it is a gross insult to the indie authors PG knows and, in PG’s gargantuanly humble opinion should be chopped up and carted off to the same social destination where the other n-word has gone.

If any readers of this post, “ache with the desire to hold a book in their hands that has their name beautifully printed across the cover,” PG is sorry for your pain and prescribes Kindle Direct Publishing to alleviate your anguish. You could even buy a couple of cartons of KDP books with your name printed on the cover and writhe around on the floor with them for awhile.

This Startup Aims To Democratize Book Publishing

12 October 2018

From Forbes:

Time was, the publishing industry could claim a stable existence, safe within its leather-bound borders. If a publishing business was held and run by competent hands, it could typically expect a nice payoff from those gilded-edge pages. Over the past decade (or more), however, sales numbers have become increasingly unpredictable.

The merging of some traditional publishers and the shutting of doors by others has made becoming a debut author perceptibly less likely. Literary agents have more methods than ever for heaving even the most adventurous and resolute new author out the door — particularly if the author doesn’t arrive on the agent’s doorstep with an existing base of eager readers. What new and unaided author can show up with the needed number of followers in tow? I would guess the number may amount to about zero.

Traditional publishers want relevant authors but have a massive challenge in finding them, especially with the scale filtering methods used today. The whole author-agent-publisher convoy has become a woefully ineffective method for discovering and nurturing high-quality literature and new titles.

But recent developments in the publishing world have allowed for a possible future. New platforms such as Publishizer, a crowdfunding literary agency, are stepping forward and connecting authors and publishers through preorders and data. This seems like a safer haven for newbie authors.

. . . .

1. No more rejection of new book ideas.

Constantine mentioned that in the U.S. every year, more than 1 million book proposals get turned down — that’s a rejection rate of about 96 percent. Not that this widespread rejection is just making an appearance now — it’s something that has gone on for decades. Certainly, it’s no secret that agents and their publisher counterparts are subjective in their choices of material to present.

We have all heard horror stories like Tim Ferris being rejected numerous times for his New York Times bestselling book The 4-Hour Work Week. And who wouldn’t want to shake some sense into those who received J.K. Rowling’s first Harry Potter manuscript — and rejected it more than 10 times? The world-famous Harry Potter series nearly didn’t get published, and Rowling was told not to “quit her day job.” The number of good books that might never see the sunlight of publication is staggering.

Crowdsourcing can eradicate these traditional roadblocks and inefficiencies by validating book ideas with readers who preorder copies after reviewing an author’s proposal, which Publishizer helps create according to industry standards. Authors then get matched to publishers based on the specific interests of acquisitions editors — before any of the book is written. So rather than being painfully rejected dozens of times over months or years, authors can be quickly connected with interested publishers.

. . . .

Crowdfunding may single-handedly bring about an era that we have not seen before in publishing, helping us find works that would otherwise languish in a literary graveyard somewhere. I believe that crowdfunding will uncover books that will delight future generations — and bring a bright new unfolding of freedom to people who have not known where to strike that power pose before.

Link to the rest at Forbes

Cheap Grace

21 September 2018

From Books & Such Literary Management:

I’ve been back and forth more times than the airport shuttle on whether I should comment on this topic. We, as Christians and especially as women, are taught to forgive and smooth things over, especially things that make us deeply uncomfortable. I’ve come to the conclusion that to keep quiet is akin to being complicit. So here goes. . . hopefully short and anything but sweet.

What am I talking about? Christian publishing’s own version of Me Too. #metoo.

. . . .

You may have seen the article in Publishers Weekly or the one in World magazine. The articles were carefully written, uncovering a troubling situation that had been going on for years in our writers conferences. Ever since word came out, naming four serial offenders, there’s been silence among industry professionals. I spoke to one person involved in a large writers conference, and she said they had known for a long time and handled the situation quietly but swiftly.

. . . .

There are women, mostly very young women, who have largely been ignored in this frenzy of forgiveness. I know for a fact there are those who felt called to a writing career who have left, feeling disillusioned and defeated. Others are still moving forward, but it has been years since they felt comfortable gathering with other writers. One of those men accused of multiple inappropriate acts said he “took the high road” and quit before being fired from his position. The high road? That is cheap grace. Women have had their lives changed forever. That is not hyperbole.

. . . .

Some of those named were johnny-on-the-spot to come out and ask forgiveness as soon as they heard that articles were in the works. Many of these men had been quietly banned from writers conferences for years– why didn’t they come out then and confess and ask forgiveness? Or even before? One wise commenter hit the nail on the head when he called it “preemptive confession.” Writers by the hundreds came gushing onto those blogs posted on Facebook to tell the abuser how much they admired him for his courage. Seriously? All the while the victims are being traumatized over and over by those very comments. I cringe to read them.

Link to the rest at Books & Such Literary Management and thanks to David for the tip.

Agent Danielle Smith’s Former Clients Speak Out

25 August 2018

From Publishers Weekly:

The children’s book publishing world has been roiling for the past week over the disclosure that Danielle Smith, the principal of Lupine Grove Creative, an agency specializing in children’s and YA authors, acted more like a literary grifter than a literary agent. Since Smith emailed a letter to her clients on July 24, confessing that recently she had “not handled a situation as well as I should have” and thus was dissolving the agency effective immediately, 19 former clients have reached out to PW, sharing tales of a pattern of malfeasance that has shaken their confidence and adversely affected their careers.

According to some former clients, she claimed to have had offers in hand that didn’t exist, such as, one author requesting anonymity disclosed, a $50,000 two-book deal. She informed others that editors had expressed interest in their submissions, but subsequently told them that either the editors had then lost interest or had outright rejected those submissions. Clients also complained about Smith’s refusal to communicate with them honestly and in a timely fashion, as well as the lack of transparency, including a reluctance to render submission lists to them upon request. Several clients allege that she even forged emails from editors and passed this correspondence along to them.

“Since this began, I and others have kept asking why, and looking for some rational explanation,” a well-known author who is knowledgeable about the situation told PW. “As more and more levels of deception are uncovered, you think, wouldn’t it have been easier to just to do the work? And of course it would have been. And the more you learn, the more all rational explanations fall away. So then I’m left wondering if the deception itself wasn’t the end game. Just the sheer thrill of getting away with it.”

The negative experiences with Smith, according to these sources, go as far back as five years, when Smith was a newly minted agent at Foreword Literary. She moved to Red Fox Literary in 2014. Smith, who was named a PW Star Watch Honoree in 2016, launched Lupine Grove in Shell Beach (San Luis Obispo County), Calif., in January 2017. Agent Jennie Kendrick joined Smith at Lupine Grove this past January.

After complaints about her surfaced on social media in the wake of that letter, Smith shut down the Lupine Grove website and deleted her social media accounts. PW has reached out to Smith for comment on the allegations, but has not received a response.

More than 60 writers whom Smith has represented at some point between 2013 and 2018 have joined a private Facebook group, where they are sharing information and commiserating with one another. While there is much speculation as to why Smith treated her clients the way she did, and the extent of the deceptions, nobody really has any answers—including Kendrick, who worked remotely from San Francisco. Kendrick says she was taken completely by surprise by Smith’s letter and has spent her time since “finding a new home for my clients.” She added, “As far as my working relationship with Danielle goes, it was professional and helpful, and she was always responsive to me and my clients, so this was just a shock all around.”

According to the former client who is referred to in Smith’s July 24 letter, who spoke with PW on condition of anonymity, Smith represented her for two years, until June. Almost a year ago, Smith claimed that she had scored at auction a lucrative two-book deal with a major house for this debut author of a middle-grade novel. “I never heard from the editor after [I] accepted the offer,” she said. “Danielle always had excuses. Eight months passed, and I saw a lawyer.”

Link to the rest at Publishers Weekly

No, you probably don’t have a book in you

28 July 2018

From The Outline:

Has anyone ever said you should write a book? Maybe extraordinary things have happened to you, and they say you should write a memoir. Or you have an extremely vivid imagination, and they say you should write a novel. Maybe your kids are endlessly entertained at bedtime, and they say you should write a children’s book. Perhaps you just know how everything should be and imagine your essay collection will set the world straight.

Everyone has a book in them, right?

I hate to break it to you but everyone does not, in fact, have a book in them.

. . . .

I am a literary agent. It is my full-time job to find new books and help them get published. When people talk about “having a book in them,” or when people tell others they should write a book (which is basically my nightmare), what they really mean is I bet someone, but probably not me because I already heard it, would pay money to hear this story. When people say “you should write a book,” they aren’t thinking of a physical thing, with a cover, that a human person edited, copyedited, designed, marketed, sold, shipped, and stocked on a shelf. Those well-meaning and supportive people rarely know how a story becomes printed words on a page. Here’s what they don’t know, and what most beginner writers might not realize, either.

Every story is not a book.

. . . .

A book may also be things that happened or that we wished happened, embellished for interest, but it’s also so much more. It’s a story told artfully on the page, tailored to the reader. A book has a beginning, middle, and an end that keeps the reader invested for the five, six, ten hours it can take to read a book, because if it gets boring in the middle, most people stop reading. A book, when published by a traditional publisher to be sold in stores, has a defined market, a reader in mind, and that reader is one who usually buys books, not just some hypothetical person the publisher hopes to catch off the street.

You can tell a story to anyone who’s willing to listen. But writing a book that people will pay money for or take a trip to the library to read, requires an awareness few storytellers have. It is not performance, not a one-person show. It’s a relationship with the reader, who’s often got one foot out the door.

. . . .

Remember writing papers in school? Remember trying to eke out 1,000 words or three pages or whatever seemingly arbitrary number a teacher set? Remember making the font bigger and the margins wider? You can’t do that to a book. I ‘m often sent stories that are way too long or too short for the publishing industry, and that makes them bad candidates for books. The average novel, for adults or children, is at least 50,000 words. That’s 50 three-page papers. Shorter books are not cheaper for the publisher to make, for many reasons too boring to get into here, and no, it’s not just cheaper to do ebooks, either. (No, really, it’s not.) If you’re an epic writer and think breaking up your 500,000-word fantasy series into five books is the key, you’re wrong there, too. A publisher doesn’t really want book two until they see how book number one is selling. And if your story doesn’t wrap up until book five, then you’re going to have nothing but disappointed readers. Writing — just getting the words on the page — is hard, period. Writing artfully so that someone enjoys what you’re writing is even harder.

Publishing is a retail industry, not a meritocracy.

Writing is an art form, books are art, but they exist in a system that relies on readers to exchange money for goods. That money pays a publisher’s rent and electric bill, and the salaries of the often hundreds if not thousands of people they employ to make the books readers buy. And if a book doesn’t make money, it’s very hard to pay those salaries. Publishers take a financial risk on a book, because no one knows how a book is going to sell until it’s on shelves, and very successful authors (your JK Rowlings and James Pattersons) help pay the bills for the less successful books. Publishers certainly publish books they know are not going to make a lot (or any) money, and they do this for the sake of art or history or prestige, or a dozen other reasons. But they can’t do it that often. So, you may have an amazing story, but if there isn’t sufficient evidence that readers will flock to it, you’re not likely to be published. No one deserves to be published just because they completed a book. It’s not “if you write it, they will come.”

Link to the rest at The Outline

Or you could write a book, click on the KDP Publish button and let JK and James pay all those salaries and bills on their own.

And never have to deal with a literary agent. Or pay anyone but yourself.

I Am Not a Gatekeeper

1 July 2018

From literary agent Rachelle Gardner:

People in and around this business have long used the word “gatekeeper” when referring to those in publishing tasked with choosing which books to publish or represent.

Since the rise of self-publishing, it has become a debate—often heated:

Down with the gatekeepers!

Hooray for the gatekeepers!

BUT GATEKEEPERS ARE NOT WHAT YOU THINK.

There is nobody in publishing whose job is to “keep you out.” Are we watching the gate? Yes!—to identify authors we’d like to see published.

Each person who has a so-called “gatekeeping” role is tasked with finding authors to bring in, not authors to keep out. Anyone who acquires authors for an agency or for a publisher is totally 100% focused on bringing in books they believe they can sell.

That’s IT.

You wouldn’t call the women’s wear buyer at Nordstrom a gatekeeper, because you know her job is to bring in clothes she believes her customers will like. Her job is not to keep out the bad, but to bring in the good.

Some publishers, librarians, agents, and acquisitions editors call themselves gatekeepers. Maybe they relish that role because they feel it gives them power. But regardless of what they say or how they refer to themselves, they’re not gatekeepers. They’re selectors. Choosers. They’re salespeople. They’re looking for books they can sell. Period.

Link to the rest at Rachelle Gardner

PG checked the almost-always helpful Wikipedia for definitions:

A gatekeeper is a person who controls access to something, for example via a city gate. In the late 20th century the term came into metaphorical use, referring to individuals who decide whether a given message will be distributed by a mass medium.

. . . .

Gatekeepers serve in various roles including academic admissions, financial advising, and news editing. An academic admissions officer might review students’ qualifications based on criteria like test scores, race, social class, grades, family connections, and even athletic ability. Where this internal gatekeeping role is unwanted, open admissions can externalize it.

Various gatekeeping organizations administer professional certifications to protect clients from fraud and unqualified advice, for example for financial advisers.

A news editor selects stories for publication based on his or her organization’s specific criteria, e.g., importance and relevance to their readership. For example, a presidential resignation would be on the front page of a newspaper but likely not a celebrity break-up (unless the paper was of the gossip variety).

Other people gatekeeping roles are in mental health service, clergy, police, hairdressers, and bartenders because of their extensive contact with the public.

And a quick quote about gatekeepers:

I sat with myself one day and asked, ‘Who is in those prestigious literary circles? Do they represent me? Do they appreciate the topics I write about and the style in which I write? Do those gatekeepers let a demographic like mine through the door?’ And the answer was no.

Rupi Kaur

PG will note that a gatekeeper’s continued existence requires that a lot of people want what is behind the gate.

Learned Helplessness

14 June 2018

From Kristine Kathryn Rusch:

I was in the middle of a long blog post about writers licensing the rights to their work when the news broke about Donadio & Olson embezzling from their clients. I stopped what I was working on and wrote a different post, because I finally had public proof of something I’d been saying for years: that important, well-known literary agents mismanage and/or embezzle the monies they receive for their clients. This has gone on for decades. It’s not something new.

. . . .

Then another reader wrote an answer post, taking me to task about telling writers not to hire agents.

He’s argued, calmly and politely, with my advice on agents before, so that wasn’t new. We disagree. He has his reasons for keeping an agent. I think those reasons are mired in the 20th century. But that’s his choice. He seems to be making an informed decision, and is taking a calculated risk. I don’t agree with the risk, but it’s his career, not mine. (I do hope he audits his agent regularly. He monitors the payments he knows are coming, but there’s no way to monitor the surprise payments.)

Then…weirdly…I started getting emails, direct messages, and notifications (from friends) of tweets taking me to task for advising that writers not have agents. I was called names. Well-known writers who have never met me wrote that I always give bad advice and that it figures because I’m …pick your hated POV here. (According to the posts, tweets, and emails {depending on who is upset with me}, I’m either bigoted or too PC. I’m against all women or too feminist. I’m always on the wrong side of every issue, and I lie, lie, lie.)

. . . .

Because you can’t fight myths with logic. Even when the myth forces the people spouting those myths to act against their own (and their friends’) interest.

In addition to the tweet-storm, I got some fascinating emails. I can’t share some of them—especially the ones from long-time IP attorneys who told me about the fraud and embezzlement at big name agencies. One IP attorney reminded me of the Harper Lee mess with McIntosh & Otis.  Ironically, according to Vanity Fair,

The agency, known as M&O, was created by Otis and her friend Mavis McIntosh, who had both reportedly left another agency in the mid-1920s after they discovered it to be highly suspect in its practices.

As I said, this crap has gone on for a very, very long time.

I got a lot of sad emails from writers who lost money to fraud, lost major book deals to ineptitude, and have given up on their careers because of agent malfeasance.

. . . .

[A] New York Times bestseller posted on my personal Facebook page that she was surprised people were talking about this issue at all (she was defending the people who were defending agents—although she hadn’t seen the truly vituperative stuff), because no one talks about agents in her experience.

Her comment was followed by a new writer who worried that he couldn’t sell to traditional publishing without an agent. To date, I’ve gotten six public comments, five personal emails and three messages on Facebook just like that, asking the same thing.

I got to noodling all of this in my head—more proof, more stories, lots of us who say we do better without agents, that we can handle our own businesses, and then I went to lunch with a new friend who has worked in the arts for sixty years. She handles her own business affairs, still.

. . . .

Artists are supposed to be feather-brained. Artists are supposed to be bad at business. Artists who are good at business are anomalies or worse. Artists who are good at business are only in it for the money. Artists who are good at business don’t understand art.

Of course, the people who are defining what that art is are mostly professors, who were unable to succeed at the business side of the art, so they have to keep their day jobs.

Some of those professors are writers with big book deals and agents.

As I was noodling all of this, though, what bothered me the most were two things in combination: that comment from the New York Times bestseller about silence and the variety of plaintive messages from beginners who are still pursuing their dreams of being the kind of writer they grew up admiring. But how do you get to one of the big five publishers without an agent?  one of those writers wrote on Twitter this morning.

Well, that assumes that a savvy writer wants a contract with one of the big five. The fact that this guy wrote the question this way proves he’s not savvy. I wouldn’t let anyone go into that shark-fest without a lot of education, the ability to negotiate, and a tough-as-nails IP attorney on their side. And even then, I would hope the writer has a good reason for going traditional, because the best negotiator in the world won’t be able to get the kind of deal that we used to get as a matter of course in the 1980s.

It was the comment though about silence that really got me. Because the New York Times bestseller was right: writers rarely discuss the problems with their agents. Writers only brag about their agent’s successes.

The writers who have been screwed by their agents are either too embarrassed to write a blog post like Chuck Palahnuik’s or those writers have signed a non-disclosure agreement as part of a settlement with that agent. Only a few of us refused to sign NDAs, refused the settlements. And when we talk about what happened to us, we’re called crazy, delusional, and outliers. When we say we handle our own business affairs, we get dismissed because we’re successful so it’s easy for us. We are lucky. Or famous. Or have connections no one else does.

. . . .

Every person in the world who starts a small business—and that’s what writing is…it’s a small business—learns how to conduct the business part of the operation. If the small business owner doesn’t learn that, then they go out of business really fast.

Artists have safety nets that most small business owners don’t have. A professorship based on a few published books and stories (as well as an expensive PhD). Or an ability to get grants. Or an employed and tolerant spouse.

The myth is that artists can’t make money. And before I confuse some of you further, I’m going to stop using the term artist (for dancers, painters, musicians, writers), and hone down to writers alone. But this applies to all of the creative arts. Artists have safety nets.

You’ve all heard that writers can’t make money, so why even try? You’re writing for the love. You’re writing to create something lasting. You’re writing to become famous or well-reviewed or accepted in your own literary circle.

You’re not writing to make money.

Only fools and hacks write for the money. The more someone publishes, the worse their skill must be. The more financial success they have, the more their writing abilities go downhill as they “sell out.”

That’s counterintuitive to the way that humans operate. The more humans practice something, the more they refine their techniques, the closer those people get to the top of their game. Their game might not be as good as someone else’s, but writers—like everyone else—improve with practice.

. . . .

This myth that writers can’t make money plays right into the hands of embezzlers and con artists. Think about it: I’ll handle your negotiations, your paperwork, your money, so you don’t have to bother your pretty little head about it.

Money gets pocketed, writers need those teaching jobs, and the leech who made the offer benefits from the myth. The writer sure doesn’t.

And then there’s the silence.

Silence is the hallmark of abuse.

Link to the rest at Kristine Kathryn Rusch and thanks to Colleen for the tip.

Here’s a link to Kris Rusch’s books. If you like the thoughts Kris shares, you can show your appreciation by checking out her books.

As usual, Kris gets to the heart of the matter in a way very few others do.

PG can’t go into any details because of client confidentiality issues, but today he finished reviewing an agency agreement from a large literary agency for a client.

It required more time than it has in the past. Not because the agreement was longer or more complex than the many others PG has reviewed.

It was the CYA paragraphs.

When lawyers are asked to review a contract, in addition to other subjects, clients want to understand what can go wrong if they enter into the contract, what their downsides might be if the whole thing goes south. It took PG a while to work his way through the potential downsides for the client’s proposed agency agreement.

This lead him to think more about the agency and publishing business and why some common practices that would be considered illegal and immoral in other settings are “the way things are done” in publishing.

PG’s Rule #1 for contracts is, “Don’t do business with crooks.”

A client could hire a whole herd (flock? colony? troop?) of lawyers to prepare the finest contract known to humankind. If the counterparty is a crook, the likelihood of the finest contract working out well for the client is still not good.

Crooks gonna crook.

PG just trafficked in a stereotype about crooks.

As a general proposition, while making one’s way through life, it’s not a good idea to deal in stereotypes. Every large group of people includes some that may fit a stereotype commonly associated with the group and others who are much different than the stereotype. In an effort to avoid wrongly stigmatizing those who differ from the group, society rightly takes a somewhat dim view of many varieties of stereotypes.

However, stereotypes can be quite useful and are utilized by most people in one form or another on a regular basis.

Who would you trust more, a drug dealer or an elementary school teacher?

There you go, stereotyping drug dealers.

Long ago, PG learned to be more careful about relying on the statements of a prospective client who was in prison than a prospective client who walked into his law office off the street. Are innocent people sometimes incarcerated? Absolutely. Are most people in prison innocent of a crime? Not really. Are most people really, really, really anxious to get out of prison and willing to do almost anything to achieve their goal? Pretty much.

Do common business standards and practices vary from occupation to occupation? Is an auctioneer expected to be more or less reliable when talking about the value of a piano being sold than a professional appraiser? Is there an unwritten code of conduct for auctioneers that affects their view of appropriate behavior when trying to sell something?

This is a long-winded introduction to PG’s concerns about agents and traditional publishers.

From a purely economic standpoint, an agent needs a good relationship with a handful of acquiring editors working at a small group of publisher much more than an agent needs a good relationship with an author who is mid-list or below in the publishing hierarchy.

Publishers who will pay a $100,000 advance for a science fiction novel are far rarer than science fiction authors are. This and other economic realities strongly influence the behavior of agents.

Looking at what’s really happening in an agent’s life, it would make more economic sense for the agent to work for and receive a commission from a publisher for locating a salable author than to pretend the agent works for the author and puts her interests first before the publisher’s.

This brings PG to customs of the trade.

Many years ago, PG learned about customs of the New York City garment industry while representing a client who manufactured and sold boatloads of inexpensive jackets. Some of the customs of the trade in the garment business were identical or similar to standard commercial law and others were much different. Those who regularly did business in the garment industry were far more concerned with applying the customs of the trade instead of anything the state legislature had ever written.

In this respect, the customs of the trade in New York City bore some resemblance to what was sometimes called “The Law of the Hills” in the Ozark Mountains of Southern Missouri and Northern Arkansas.

In some cases, juries were more influenced by the Law of the Hills than they were by The Revised Statutes of Missouri or anything the judge might say about the case. While the state law might look askance at a husband beating up his wife’s lover, the Law of the Hills permitted such actions as long as nobody was permanently crippled.

PG posits that the customs of the traditional publishing trade, including the customs of the literary agency trade have created an environment in which an agent can do far worse things than fail to forward payment the agent receives for royalties from Russian sales to an author. The author’s never going to know and such an action won’t harm the agent’s reputation with HarperCollins even if someone at HarperCollins finds out about it.

When faced with a choice between promptly paying every penny of royalties due to an author and keeping the doors of the agency open, the customs of the agency trade dictate that the survival of the agency is paramount. An agent will make the same decision once, twice, three times — as many times as it takes to survive.

Thus, an otherwise honest and honorable group of people can be lead down a path that ends in systematic and large criminal diversion of funds away from authors and into agents’ pockets. PG’s gut tells him that this has happened at a great many agencies, both small and large.

It’s a custom of the trade.

An iconic literary agency is fleeced by its accountant

13 June 2018

From Melville House:

Usually, when sums of cash north of one million dollars are invoked on this blog, it is because a celebrity has just received a mega-advance to write a book, or because Amazon has avoided paying that much in taxes.

Today is different, though. We’ve got a real caper on our hands.

The New York-based literary agency Donadio & Olson represents some huge talent — such as Chuck Palahniuk.  Last fall, one of the agency’s clients was expecting a $200,000 advance payment that never arrived. The author tried to contact agency accountant Darin Webb, but still didn’t receive the check for months.

That’s because Webb had processed that payment, and many others like it, as a payment to himself. Crazier still, he’d been running this skim-scam since 2011.

. . . .

The agency now has a forensic accountant investigating nearly twenty years of financial records to determine the full extent of the theft, and to begin re-paying the authors unfortunately caught up in the con.

A lawyer for D&O has stated, “The agency’s singular focus at this time is ensuring that all of its impacted clients are made whole to the greatest extent possible, and the agency is cooperating in every possible way with the government’s efforts.”

Link to the rest at Melville House

PG realizes there is not much new information in the OP that hasn’t been included on prior posts on TPV.

However, he wants to provide as much information as possible about this matter because it should be thoroughly understood by authors.

The quote from the attorney for Donadio & Olson, “The agency’s singular focus at this time is ensuring that all of its impacted clients are made whole to the greatest extent possible,” is structured in a telling way.

“The agency’s singular focus”, “ensuring that all of its impacted clients”, “are made whole”, all sounds very reassuring for authors who have lost money for years.

Unfortunately, these statements are limited by, “the greatest extent possible”.

PG suspects the agency cupboard is bare or almost bare. One of the many questions that immediately come to mind is whether the agency principals received any of the embezzled funds. Were they victims or co-conspirators?

Either answer to that question should ruin the reputation of the agency principals. If they were victims, even preliminary evidence points to a conclusion that these people do not know how to properly operate a literary agency and carry the responsibility for safeguarding money that belongs to other people.

Did none of the agency’s clients contact the principals about low royalty payments over the many years of embezzlement? After presumably multiple queries by multiple authors did the agency principals ever question their accountant? Or have an outside accounting firm come in to look over the books?

If they are co-conspirators, then criminal punishment would seem very likely.

The press release announcing embezzlement charges against Donadio & Olson’s accountant from the US Attorney for the Southern District of New York does not mention the name of the agency, referring only to “a Manhattan-based literary agency”, “the Agency”, or “a firm in the book business”. PG doesn’t know whether this is part of a strategy by the US Attorney or the result of the persuasive abilities of Donadio & Olson’s lawyers.

While PG has visited New York on many occasions, mostly for business purposes, he is definitely not an expert on the city or state. However, his impression is that the New York state legislature is quite active in passing laws on a wide variety of subjects.

Presumably, it is of some financial and social benefit for the city and state of New York to be the headquarters of the traditional publishing industry in the United States.

While he is certain members of New York’s political class do not pay any attention to him, PG proposes some legislation to maintain the reputation and status of the publishing biz. The principal elements of the proposed legislation follow.

  1. No one may act as a literary agent in the State of New York without being properly licensed as such by the State of New York.
    1. The State may establish minimum qualifications for persons seeking to be licensed as literary agents, including the requirement that a prospective agent take and pass an examination covering an agent’s duties and obligations under New York law.
    2. A person located outside of the State of New York will be deemed to be acting as a literary agent within the State and be subject to the State’s regulations respecting literary agents if such person is representing authors in the negotiation of publishing or licensing agreements with any company whose primary business is located within the State and has successfully concluded more than one such negotiation on behalf of an author during a given calendar year.
  2. A literary agent is obligated in his/her fiduciary capacity to safeguard the funds of each client represented.
    1. Failure to do so may result in revocation of the agent’s license and/or additional penalties.
    2. An agent may be held personally liable for damages resulting from a breach of the agent’s fiduciary obligations to an author.
    3. Each agent working in a literary agency has an obligation to promptly report any improprieties of which he/she becomes aware involving the safeguarding of client funds to appropriate state authorities.
  3. Each literary agent must maintain a separate trust account with a New York bank or similar financial institution for the purpose of depositing and disbursing all client funds.
    1. All client funds must be deposited into the trust account as soon as possible after their receipt.
    2. All payments from the trust account must be paid to the agency’s clients within 15 days of receipt by the agency.
    3. On at least an annual basis, an agent will provide each client with a full and complete written accounting of trust account activity involving the client’s funds.
    4. Commingling client funds with agency funds is prohibited.
    5. On at least an annual basis, each agent will retain an independent outside accountant to conduct an audit of the agency’s trust accounts and provide a written report of his/her/its findings. Any client may request and shall promptly receive a copy of the accountant’s report for any year during which the agent was representing the client.
    6. The State of New York may audit an agency’s trust account for purposes of ensuring compliance with the law at any time.
    7. The agency’s trust account obligations shall not apply to any funds paid directly to its clients by publishers or other third parties with which the client/author has a written contract.
  4. The Attorney General of the State of New York is authorized to receive compaints from any person respecting a violation or potential violation of these laws by an agent or literary agency. Within 90 days of receipt of such a complaint, the Attorney General shall make the contents of the complaint available online to the public.

PG welcomes any additions, changes, etc., to his proposed Literary Agent Licensure Code.

He notes that, as a general proposition, he does not support widespread occupational licensure requirements (hair braiding, etc.), but, given his experience with authors and agents generally and the latest from Donadio & Olson, he thinks the time for licensing agents or imposing some type of effective regulation on their actions and practices has arrived.

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